The choice of edible oilseed crops is supported by the fact that Tanzania’s large national demand for edible oil requires imports to meet about 60% of demand [ 1, 11 ]. The demand for imported edible oils is increasing, resulting in about US $ 294 billion of foreign currency reserves being spent annually [ 1, 11, 12 ].
Does Tanzania have a shortage of edible oil?
While the local and regional market for edible oils is large and growing, local supply in Tanzania is not keeping up. Given a shortfall of 360K metric tons, Tanzania imports over 60% of the country’s cooking oil. This costs USD 250M in palm oil imports every year, making it the sector with the second highest foreign exchange transactions by value.
Should SMEs invest in edible oils in Tanzania?
In particular, the team found that large Tanzanian companies are well positioned to make this investment; investors can source raw materials from local SMEs, which would experience higher productivity from rising demand. In late 2017, the USAID team designed a three-phase feasibility study for the edible oils sector.
How much edible oil does Tanzania import a year?
Critical IOA Unit Tanzania imports 320,000 tons of edible oil per year. Tanzania’s annual demand for edible oil stands at 500,000 tons, whereas the country can supply only 180,000 tons, forcing it to import 320,000 tons each year, signaling major opportunities for import substitution (7).